New Report Shows that Slow Health Care Spending Growth Continued in 2013, While Near-Term Trends Remain Encouraging

(White House) New estimates out today from the Office of the Actuary at the Centers for Medicare and Medicaid Services show that national health expenditures rose at historically slow rates in 2013, continuing the exceptionally slow growth in health costs seen in recent years. This slow growth, which is thanks in part to the Affordable Care Act, is already generating major benefits for both the Federal budget and our economy.
The near-term outlook in today’s report is also encouraging. Consistent with recent surveys reporting that millions of Americans gained health insurance coverage over the Affordable Care Act’s initial open enrollment period, the Actuaries project a sharp reduction in the number of uninsured Americans over the next few years due to the new coverage options made available under the Affordable Care Act. Unsurprisingly, the Actuaries predict that this dramatic expansion in coverage and access to care will temporarily increase growth in aggregate health care spending. But, consistent with a variety of incoming data, their projections imply that underlying growth in health care prices and per-enrollee spending – the factors that determine the premiums and cost-sharing that families face – will remain subdued over the next few years.
Over the long term, health expenditure projections are always more uncertain. While the Actuaries project that the recent slowdown will largely dissipate as economic recovery continues, the balance of the evidence implies that much of the recent health care spending slowdown has been driven by structural changes, which suggests that a significant portion may persist. Because of the large size of the nation’s health care sector, if even a modest portion of the recent slowdown continues in the long run, it would have a transformative effect on the Federal budget, families’ budgets, and the economy as a whole. For example, even if as little as one-third continues, then, by 2023, national health expenditures would be $1,200 per person lower than if costs returned to their prior trend. In the years ahead, the Administration will continue its efforts to create a health care delivery system that consistently provides efficient, high-quality care, with the goal of making that transformation a reality.
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